The investment community generally prefers the philosophy of economic conservatism to that of liberalism. Romney probably has a large lead among investors. Nevertheless, the markets prefer Obama. Here's why.
In September Ben Bernacke, Federal Reserve Chairman, announced that the U.S. government would print billions of dollars in new credits to buy bonds to stimulate the economy. The stock market and gold rallied in response to the expectation of "easy" money. A few weeks later Bernacke said the U.S. would print all the money required, for as long as it takes, until America goes back to work. Beijing, London, and Brussels all followed the U.S. lead.
The U. S. stock market is in rally mode, having recovered from the Great Recession. At a time when money creation is booming, the economic data are clearly showing an improving U.S. economy. The Feds are stimulating the economy, and there are signs the economy is responding.. Regardless, the markets are responding.
Investors want Obama because Romney has said he would remove Bernacke , which would end the stimulus driving the current market rally. Romney believes that over the course of a year or two the economy and markets would be stronger with sound money policies. Whether or not he is right or wrong is a question of policy and debate. What is undeniable is that it takes money—lots of money—to move markets. Romney says he will remove the current source of money gushing, and that is bad for stocks short term.
The immediate reaction to the election results—assuming there are results Wednesday morning—may be up if Romney wins and down if Obama wins. Within hours, though, the markets are likely to show how much they like easy money. If Obama wins, this rally will continue and we will see higher asset prices in the coming months. If Romney wins, the rally will collapse and we will see a significant correction.
Long term the U.S economy will roar. We have the strongest military; the technology; and we are solving our energy costs, which will lead to a manufacturing boom. Labor may be cheaper in China, but energy is cheaper in the USA. Our entrepreneurs are bailing us out while the politicians shout nonsense and the crony capitalists like Donld Trump clown around.